Various Claimants (In Wave 1 of the Mirror Newspapers Hacking Litigation) –v- MGN Ltd  EWHC B13 (Costs)
It was held by Master Gordon-Saker that the factors for considering proportionality under CPR 44.3(5) are all equal in terms of their importance and weight and did not prevent the recovery of costs in an amount greater that the sums in issue.
Following commencement of assessment proceedings, the parties were able to agree the reasonableness of base costs of each of the Claimants. The issue before the Court was what effect the post-2013 test of proportionality had on the agreed costs of the individual Claimants.
The Master set out, and went through, the test of proportionality contained within CPR 44.3(5). In doing so he observed that no guidance had yet been provided by the Court of Appeal on the working of this rule.
The Master found that CPR 44.3(5) (as had Master Rowley previously in the case of May) did not identify any of the five factors as being more important that the others and dismissed the Defendant’s submission that the sums in issue and the value of the non-monetary relief were the primary factors.
The Master held that CPR 44.3(5) did not prevent the recovery of costs in an amount greater than the sums in issue in the proceedings; had this been intended then the rules would have stated this.
Master Gordon-Saker concluded that the financial value was but one of the five factors and so there would be cases where, by reason of the other four factors, the costs would be proportionate even though they exceeded the sums in issue.
In his Judgment, the Master held that this was such a case and that the value of the non-monetary relief and the wider factors he identified justified the conclusion that the costs can be proportionate even though they exceed the damages.
Even though Master Gordon-Saker has effectively confirmed what rule CPR 44.3(5) already states, in our experience paying parties have always placed significantly greater weight on the financial value of the case than the other factors when applying the post-2013 proportionality test.
BNM v MGN Ltd had already handed down its judgment regarding the question of whether the post-2013 proportionality test should apply to additional liabilities and so this was not an issue in this case.
Before providing his judgment, Master Gordon-Saker stated that this judgment should not be taken as any attempt at providing guidance. Whilst it is accepted that the decision the Master reached under each of the factors of the proportionality test is strictly case specific, the decision he reached confirming that all factors under CPR 44.3(5) are equal and as important as one another (which confirms the view we at Civil and Commercial hold), should be considered helpful guidance.
Marc Harris is a Costs Lawyer based at Civil and Commercial Costs Lawyers’ Bristol office.
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